Manage Your Money for Maximum Profit

Lesson 16 of 23

Efficiency = Profit

 

Manage Your Money for Maximum Profit

Lesson 16 of 23

Efficiency = Profit

 

Lesson Info

Efficiency = Profit

Kirsten I think I got it I got it so what did you get what you figure out I went through my sales report and found the top six sellers for the past five months or so okay um and it works out quite well that two of them our boy patterns two of them are girl patterns and two of them are well I need to find one more neutral one of them's a neutral and one of them's like another girl lads look at our chart here you had was a nine thousand eight hundred revenue, right? Yeah, today of those six products you've identified and I'm trouble of the six you've identified what have revenues represent? I don't most of it I don't I don't know I'm not hiding under your top sellers because that's what my report said based on what he saw in revenue yeah, but I like it it broke it down like it didn't say how much of my total revenue they were I don't know I didn't look that close so good at least you know the six now and so that for the next segment I'd like to know how much revenue it represents okay? B...

ecause once you have that we're going to figure out what's called the parade of principle the tweedy twenty rule those six I'm anticipating are gonna represent the majority of this revenue problem almost all of it but maybe not only what they will we had some like old old old ones that we sold off kind of like lana one of those deal site needs that with drinks whatever so those ones accounted for some bargain bin themselves I wanted t sure those will be but good and I love it that were going on a break and you're working your business that's awesome aladdin and jason you had a question right before we went on the break and I want to know what it was about it was I think it is when we're looking at rina's chart here and the question was as a solo preneurs who doesn't have employees working for him? Is there difference between business debt and personal debt and how we ran that the order of how we pay it off that's right? So in rina's case you know, retail maybe personal right? The target card actually it was business is business ok with student loans personal is personal car is bose both okay? The game that we can place on especially if you're a solo entrepreneur is that we can say, well, our personal debt and our business debt are separate, but quite frankly they're really the same when a lot of entrepreneurs do as they say, well, I'm going to be business debt free actually you were saying I told you that I have no business that I have no personal debt but then the business carries all the debt and then what some people do say, well, I want to get rid of all that with that in the business they start pushing it there but really what they do is flip the debt over to their personal responsibilities and becomes this game of flipping box back and forth the debt is that is that and you're going to pay the piper so I found the best especially if you're a soul entrepreneur just blended all in together okay, okay uh is this one thing but if you're in a larger business you do want to maintain them separately in montreuil separately but the goal is to eradicate all dead of course good good answer questions from the prior session segment when you get to that point of moving from sola preneurs into a larger organization larger corporation whatever it is that you were looking to move into what is the best like process to actually start pulling those two things apart? Um so when you do you accept it if you're gonna have a debt instrument like a credit card set him up separately so have a personal credit card in a business credit card and the two shall never meet right? So alive is she's one credit card to do both those purchases breaks are breaking out everything like that so any loans it's very specific to the business or personal okay that's basically a golden of course is trying to eradicate that its entirety okay, good questions so what would you do in this session is talk about efficiency and whites equal profit the more you can do the more officially khun do and achieve the same quality of same results the more money you gonna make we're talking about the sweet spot client says mint bender well, these are all things I taught and british jason recognizes in the pump complaint. So this is what I call the sweet spot spot in business and it's something I learned from, of all things colossal pumpkin farmer's so I want to share the story about them real quick back in around two thousand uh just by happenstance I started studying pumpkin farmer's uh not just any pumpkin farmer not the ordinary folks but these colossal pumpkin farmer's and found that there's a faction of men and women out there that grow these like mom meth have you seen these pumpkins there? Just a huge big toothy smile on it and was fascinating was was if a pumpkin naturally grows to fifteen pounds or twenty pounds, how did I get it pumping growing to like a ton? Well, they do a few things differently and it's it's designed actually I have a kind of shown in this chart they specifically pick a specialized seed they investigated seed for a couple elements three elements they look for what's called the vantage on the outside of a pumpkin speed seed. Are the veins of the seed the stronger those veins in the car or the bigger they are, the more likely this. The pumpkin will grow faster and be bigger. They look for seeds that match the climate that they have in their environment so you can grow. We're filming here in san francisco you go colossal pumpkins in san francisco or new york or northern canada, where southern argentina mean anywhere in the world you go classic pumpkins. Different climates, though, require different type of seed. And then, of course, the soil content to the nutrients and what the soles made up is relevant to say. Look, these three elements. What was fascinating about business is there are three elements that we need to identify in our business that will dictate colossal growth. And this is a representation of it. Ah, first here on the left side, we have uniqueness. What does this mean? How are we as individuals? Unique and how's our business. An amplification of it when I meet with entrepreneurs, it's a real simple question. I when I asked him about the business, if they say my business is my soul mate I know that person is going to take off just a matter of when the business is going to take off when people say I do this because this is what customers want I don't have to do it less likely to be distinct and unique. So the question is what distinguishes you as an individual and how is your business an amplification of here's a great example apple computers you know gone apple computer right there jake have apple computers you know apple it was grew explosively uh under the tutelage of steve jobs. Well, steve jobs had a uniqueness, an idiosyncrasy and what something what's interesting about uniqueness is is that when we were children before we knew the social norms before the thin you know rick talks about stuff like this when we were young children before we knew the social norms the expectations appears what authority figures like our teachers and parents wanted we just behave how we thought we should behave who didn't know the rules lt's so often when we were young children we expressed our true natural selves then as we get older we start complying maur maureen fitting in with society expects we've become actually less comfortable in our own skin but the society expects that so weii behaved how they want us to some entrepreneurs reconnect with their idiosyncrasies what distinguishes them and then exploiting their business and steve jobs is a perfect example steve jobs had something that he was made fun of for in grade school he was picked on by his his peers. His teachers disciplined them about this. Yet he exploited. This uniqueness is oddity. When he started and built apple computers, they wouldn't know what that is. Just gas. He's left handed. Yeah, but that was not it. But he was something about buttons. So it right, right, steve jobs had a phobia of buttons. Four young buns. Jacob haven't heard this just steve. Yeah, do a quick wiki search and I love to see what the audience knows about this to steve. Jobs had a phobia but holmes that's why you'll never see a picture of him without anything but that turtleneck on a button lis turtleneck and just look at his pants. He doesn't button flies on to expand ex or something. He had a phobia of buttons. Now most of us wouldn't heart talk, get to defeat your phobias. What makes you different is what you have to cover up. But steve jobs exploited it. You seen their products? Here's the iphone. You see me buttons on the iphone. I can only imagine that first meeting steve jobs had with his engineering team. Ah, when iphone was released, the popular product was the blackberry over the blackberry right? I mean that was the dominant force who had a blackberry back in the day no one no one had a couple of john did okay you did okay so people few people have blackberry I had one to the dominant product and I suspect steve jobs went his team said here's the blackberry product scotty's buttons on it we wanted teo come out with a better product for apple right in his engineering team went believe in the philosophy of better is better saying well this is what most businesses most people think it's just be better than the competition do with competition does but better and they said well we wish just add more buttons and they probably came back to steve and said hey check out our prototype you see now the matrix he's like oh but uh he goes falling back he was freaked out by pardons he's in no way get rid of the buttons because of his fear of buttons he was the first company to blend technology with art right and here's the funniest thing this is not the best representation of an apple button this product how many buttons are on apple mouse you know none none maybe one on the old fashioned ones a microsoft product or the pc there's a mouse has rowley wheels has a glove mechanism like a foot pump like that is where the mouse is supposed to be like and if we stay, this mentality of better is better do with competition doing just better you get stuck going down these rabbit holes, but if you exploit you're in her true self your idiosyncrasies what makes you distinct and your business becomes the amplification of it changed the way the world operates, so when it comes to the prophet sweet spot, we have to realize we have to be actually true to ourselves, not more honest truth ourselves we have to exploit what makes us unique and distinct. The second element here is demand you have tohave customers wanting what you offer, right? So here's a funny saying does anyone know uh, oscar wilde? If you heard of oscar wilde wrote he wrote uh dorian gray that the book he wrote price's book dorian gray oscar rods from the seventeen hundreds I think he was a french lad he made good millions of dollars and ultimately after selling his book passed away destitute in jail totally impoverished toll impoverished because he had the propensity to expose himself and there wasn't much customer demand for that that's the other lesson just cause you like to do it. If people don't want to buy it, you're screwed so just because it's unique and something you like to do doesn't necessarily mean it's going to successful business, there has to be demand for here's the great lesson with customer demand look for your past customers as you put it out to market you've experiment with the market are there people coming back to you repeatedly when people buy from you repeatedly? They're demonstrating through their behaviour that they like what you have to do now people also say you know I love your work love your work love your work but they won't buy from you do not trust the words that are spoken trust the actions people take in fact, I have a little saying a rope for myself trust wallets, not words why is that? Because it's socially appropriate to light each other and actually we even us getting to know each other so well we're so lying to each other this morning cause ever came in how was your how was your night everyone's night was perfect best day of my life everything's fantastic couldn't be statistically everything can't be perfect but socially appropriate to say everything's perfect because god even you can't be so how was your night last night was freaking miserable you think I don't want to hear this awkward and you'd walk away so I know the social norms I know so smart when you asked me how is my life it's perfect everything's fine, good, good we're good, we're good, we're good I don't know if I'm gonna make another day, but we're going it's socially appropriate to say things are fine and our customers follow that same they have that same propensity how my work is fantastic I love what you do love your speeches. We will say that but doesn't actually mean we believe it. Yeah, say your service business that they're only going to use one time weddings usually people are only getting five times or five. Uh, what is another marker to look for? Yeah, that's a great question s o I was asked that I have a group even even that that's guaranteed a one time purchase I was presenting at yankee stadium and yankee stadium to the funeral directors of america. And I'm just saying that I was sharing this exact same thing, and I'm like, you know, you have that repeating customers and what guys like, you know, we never had more than one. You look for a repeating demographic, is there a certain type of person, female, male, certain likes, married single gay straight age racket with haba baba? You look for it if you were repeating demographic that's the indicator, okay, that's, the indicator so first is you want, ah, uniqueness that distinguishes you, and then you want to seek out people that are resonating with that uniqueness, and they're showing through their demonstrate that they really like kitt by their actions just one little more story because I think this was funny I was invited to there are no villains washing from copenhagen today, so just there's a shine on my blokes in copenhagen, my friend's out in it eyes in copenhagen two years ago I'm doing presentation to midcap corporations now what a mid cap is is a company that's five hundred million in revenue us to a billion dollars in revenue these air you know, big companies there was five to seven hundred people in the audience and I'm telling this exact same principle and why I'm telling them because I don't care how big or small company is this matters if you're branded started and you do zero this matters if you do one with lots of zeros this matters so I'm sharing this exact same thing with them and each table at this event was the team that they call the c suite the sea level people the ceo, cfo, ceo always different see people and are always different tables, and I start telling him this, uh, this routine and as you can tell and as the camera and now knows I get really into I get hyper and run around like crazy, I'm perspiring I have this bill brown mark on my hand and I'm drawing this chart on the screen on the bore me all into it as I'm going I start perspiring rick you know you're the stays lights are on you I'm slightly crazy I'm like don't think about that and as I say that I take a breath and there's this drink your sweat coming down so I go upto wipe it off with the marker in my hand I drew the most massive unibrow you've ever seen like it came out and somehow even came on my face and hooked around is like so big and no one said anything all the side you should have seen the tables and everyone's like taking notes as I was going along all of a sudden people like oh my god and they're like this like some people are looking between their fingers like that but no one's looking at me at the forty five minute presentation at the very end someone comes up in there like you need bro yeah and I discovered I had this massive unibrow the lesson here is is don't draw you to browse on your face the other lesson is that people speak the truth their actions and not to their words right no one said anything because you easily you do you look disgusting now their actions don't look at the guy was demonstrate what's going on with our customers we've all been told take surveys email him how things were going on calm on the phone how do you like things have things going be prepared to get light toe. They'll never say, you know, your business, your deejay worse tj experience ever had unless you're looking for a refund uh, yeah, then they'll do that to leverage you, but that was pretty good. It's pretty good. If they have a little tweaks or suggestions to improve your business, they probably won't say it only if you're looking for a refund and and that's a leveraging technique is not a truthful technique either if you ask customers what you think, they won't tell you, so we have to measure their actions. What distinguishes you? What makes you unique? Who were the people that are demonstrating through their actions by buying repeatedly or the demographic that's buying repeatedly from you? Those of focus you want folks you want target in the last element is you have to systematize it and what assistance that his system matiz ation mean it means this. Can you attract a prospect? Convert the prospect to a customer, have a customer pay you money, have that money, go into your account and clear and they love you so much that they start referring you to someone else all while you're sleeping, you see if the business could go full cycle from attracting a prospect to delivering the goods and they're referring you and you don't have to do anything that's a purely systematized business and can grow explosively I recognize some of our not or businesses khun do that if you're a public speaker if you're an artist you can't do it you can do huge parts of it and I want to call out you travis when it comes to being an artist I saw actually maybe including my next book I studied the guy named peter lim well, you should check him out. He was a british artist back in the eighteen hundreds he built our he painted the royalty in england I think john's family was part of it wait who's painting the royalty there and he did ah famous piece about cem cem queens and princes I remember the name of peace but here's what was fascinating if you visited the exhibit which is in england of peter lily you'll see that interestingly, all these different people he painted they usually posed the same way they have like five or six common poses. What he was doing was he systematized them from the neck down. He would go to that one of the queen's or royalty do the painting of the face himself. Then you go back to studio and have one of his trained apprentices do the rest of painting. They were doing ninety percent of painting, he was doing the face he became the most prolific painter up to that period of time ever because he could put rollout at ten times the volume of paintings and the quality was perfect because he designed those bodies and just told him how to replicate it and he was painting the faces so even an artist can systematize you know the opportunity exists for everyone well it's when you have these three elements blink linked together you're truly distinct your amplifying who you are there's customers they're wanting it and buying repeatedly and you find ways to systematize it significantly this is a business outgrow greatly and you'll hit what's called the ss which stands for the sweet spot now most entrepreneurs I suspect most folks watching in right now most of us in this room probably have uniqueness now I would challenge you may not be exploiting enough I would even argue rick, you have a really interesting angling uniqueness I think you could take it to another level I don't know how I know you could I think we need to really play up our uniqueness is more all of us challenge ourselves there well, we have this going on already and expect everyone this room I know every room has customers of some sorts you have demand and assume some customers have come back to repeatedly see if you could demand but if you don't have the system ization element you are in what's called the tfm trap stands for time for money we should get it together jason like it is the time for money trap which means being in your business but on your business well in my world it's I'm coaching everybody one two one right exactly one right until now yeah if right freaking doing it no one's doing yeah, so the time for money trap is where the business is growth is contingent upon our time nearly exclusively and if we're not delivering the business can't crowd we all know is capped out there's only twenty four hours a day there's only really maybe twelve working hours a day for your just pure exhausted and that's probably been unrealistic maybe it's ten so it's time for money trap the um the other traps, by the way are demanded system ization so these air businesses that are running efficiently replicate herbal doesn't need the owner doing the work there's demand for it but they're not unique we're having this cases you get what's called dpp stands for downward price pressure okay downward price pressure is where you you're doing something people want systemized but since it's not unique anyone can do it so now you're forced to compete right? What was that case it's a saturated market? It is well, right, but even like this's oh he's just a regular deejay market if you're just a regular deejay there saying, well yeah, we need tj's um any djs you just mix your songs and blah blah blah and then but are you cheaper and cheaper? The question if you're a deejay that can mix music, what you do in a way that no one else can this conversation never comes up it's like I gotta have jason he's he's the world's best he's only guy can do that this goes back to was arena or marci uh I don't know who we're talking about but uh in exploiting uniqueness and distinguishing your business it's how you break out of downward price pressure someone give her a hot seat and we're kind of talking about that that maur this things and unique you are the opportunity to break out of that price consideration exists big time. A quick example of this is in circuses the number one largest circus in the u s is barnum bailey circus right? Ever heard of barnum bailey ringling brothers okay there called the incumbent they're the most established circus in the in the circus industry an incumbent means that if you decide to go circus and may go from friends or family monique the safest bet is go to ringling brothers barnum bringing brothers and barnum bailey you can't go wrong it's the big circus the incumbent can charge the highest price the number two circus at least where I am in the new york area is called the big apple circus if you're from the new york area but I heard of them if you're not, you probably haven't just like I never heard of this who are these guys? Yeah, well, they are not the incumbent you've heard of ringling brothers the big player so for big apple circus to compete they have to be a cheaper price dour price pressure because you're not unique they're just another circus and you could go down the whole circus level down to the lowest level which is the carnies uh, which you paid five dollars not to touch your child. You know, I think that down there it's downward price pressure, the less established you are and if your fight you're competing this area there's demand we wanna go circuses we wanna be entertained and er system eyes you can deliver it but you're not distinguished. You become subservient to the incumbent they dictate determine the price every knows has to be cheaper to get business but one circus broke that hole. All the rules cirque du soleil, cirque du soleil ringling brothers and barnum bailey circus khun dictate in massive square garden in the heart of new york city premium seats one hundred fifty dollars amount most taken charge it's worth it for the incumbent uh circus if your big apple circus same seats, same venue, same everything seventy five bucks you're a carny now that you're a carny thank you yeah if you're a former I should say if you're a former car you get paid five dollars not to touch people's children right that's a whole other story yeah there's a lot going on at work yeah there's a lot going on there's a lot going on over there but short to soleil sir to soleil you know what they get ticket this guy's a two to three hundred day I say obviously sir to slay freaks right here lovers of circus like two to three hundred dollars a ticket it's insane but they're not a circus at least that's what we say now here's what's interesting if you study search slaves infrastructural cost the way they run their business ninety percent the same as a circus same venue cost same insurance cost transportation but similar acts they have acrobatic acts in all these different things surface lay researched out how how circuses air run and saw what customers were resonating with and not and they found that customers love circuses but we don't like the clowns we really don't they do freak us out a little bit but we do like is the animals in the big lumbering elephant that's walking around but we don't like the animal abuse so when the trainer comes behind using hitting the elephant we don't like it so search this place and we're gonna ditch the clowns and I don't know why you're doing that you wouldn't that gesture was real bad and we're in distant lands and we're going to remove the animals but since consumers still like animals were goingto acrobats in elephant costumes in the elephant costume guys will walk around they won't know the difference and we love it so minor changes and they become unique because they amplify acrobatics to points ever been done before they change the stage from a circle to a platform typically and search the sleigh is now unique you changed the name so barnum bailey circus really brothers circus all these different circuses and cirque du soleil change the name from this this the english name to a french name and the best part is they're not even french they're canadians from montreal for montreal so given that speak they speak french but they're not for and by changing the name they become unique I suspect the very first time you as an english consumer heard cirque du soleil I suspect your mind for a moment if you don't speak french said what does that mean? You see when customers say what does that mean they've you've broken out of the generic box what does that mean means the consumer this must be something different and they start looking for something that's different and cirque du soleil was this a little bit different more acrobat stitch, two clowns and they became unique and they can dictate to the three hundred dollars a ticket in our businesses exploit your uniqueness on account I mean you could do that stuff but any accountant can do it you're a guy who drives probably in the business and you're not accounting you're probably specialist in customs go profitably specialist what does that mean? And that means you broken the label of accountants and you say I can do it accounts do anyone can do that like a circus it's easy the tough part is driving probably in the business and we all need to do that that's why you're not d j you're in entertainment uh everlasting entertainment experience experience yeah close enough yeah that's a tough one to remember but stop so it's okay maybe something's laws of triggers it's something different you know you made the opportunity now I want one thing I suggest is for the customer has to be easy to remember to write you know all right so that's the these things so if you if you step if you're if you have demand and system ization but you don't have this uniqueness down price pressure if you're unique and you have demand many of us were the time for money trap if you're unique and you khun systematized er but there's no demand this call being screwed up because you have nothing going on here uh, and I stands for no income, but I prefer saying, you're you're being screwed, unique in system ization, without demand is, you're screwed. So the sweet spot is those three things. So what, you also call that market research? We'll call. What market research, I mean, this whole process, it's. Like when you're a well, particularly the uniqueness part of it, right. When you're here looking at your mother, wished the same thing. I want more observation, meaning watch was happening natural in your business.

Class Description

Ready to take full control of your business’s financial health? Join Mike Michalowicz, author of The Pumpkin Plan, The Toilet Paper Entrepreneur and his newest book Profit First, for an immersion into understanding the shockingly simple principles behind financial management and leveraging it to grow your business.

In this course, you’ll learn the core four principles of financial health and how to use them to create a profitable "rhythm" for your company. You’ll also learn about the psychology of managing your debt, whether you’re struggling with credit card debt, loans, or personal guarantees. Mike will also cover ways to bring new money into your business through cost-cutting, renegotiating, finding lost revenue opportunities, and much more.

By the end of this course, you will have escaped the panic-driven cycle of operating check-to-check and you’ll have a foolproof way of ensuring that your business becomes permanently profitable... from the very first day that you watch this course.

Reviews

Viktor N.
 

It was a great course, packed with a ton of valuable and actionable information and resources. I enjoyed participating in the live chat during the course and getting my questions answered live by Mike. I purchased the on-demand course so I can always go back and watch parts that I need help with the most. Keep in mind, in addition to this course, I would also recommend getting Mike's Profit First book/ebook. That's what the course is based on, and if you're like me, having it in a text version helps find and highlight important points. Highly recommend for all business owners at any stage of their business!

Ella Heath Photography
 

Wonderful class!! Not only is the content very impactful and life-changing but Mike's funny character made the class very entertaining - the marker on the forehead story made my husband and me laugh to tears!! We are implementing Profit First right away. Thank you CL for hosting such an amazing class.

a Creativelive Student
 

Exceptional. Never thought that a money management course would be engaging, thought-provoking and would change my business. In one segment of this class, I completely reworked the finances of my business. Great stuff. Highly recommended. If you run your own business, you NEED this course. It will pay itself off so quickly, it'll amaze you.